Telesis Bio Inc. (TBIO)·Q3 2023 Earnings Summary

Executive Summary

• Q3 2023 revenue fell to $5.56M, down 16.6% YoY and sharply lower QoQ as milestone/collaboration and kit mix normalized; gross margin compressed to 53.9% from 65.8% in Q2 despite ongoing OpEx discipline (5th consecutive quarter of reduced/flat OpEx) .
• Management slashed FY2023 revenue guidance to $28–$30M from prior “> $45M” set in March, citing broad industry capital spending weakness; no explicit update to prior FY margin or OpEx guidance was provided in Q3 materials .
• Liquidity and covenant stress escalated: TBIO disclosed default under revenue covenants, a required $15M term-loan repayment in November, and “substantial doubt” about going concern in the 10-Q .
• Strategic execution continued: launched BioXp NGS Library Prep Kit, advanced SOLA enzymatic DNA synthesis strategy, and completed insourcing of BioXp manufacturing; “7 Days to mRNA” campaign went live .
• Key near-term stock catalysts: magnitude of guidance cut, going-concern disclosure, and forced debt repayment, versus continued product launches and cost controls .

What Went Well and What Went Wrong

• What Went Well
  • Continued product innovation and portfolio expansion: launched BioXp NGS Library Prep Kit to reduce hands-on time and costs for NGS workflows .
  • Strategic progress on mRNA/SOLA platform and go-to-market: “7 Days to mRNA” campaign launched; SOLA plan resourced as a potential high-growth, high-margin line of business .
  • Operating expense discipline: $13.1M in Q3 vs $14.9M YoY; fifth consecutive quarter of reduced/maintained OpEx .
• What Went Wrong
  • Revenue shortfall and adverse mix: total revenue declined 16.6% YoY to $5.56M, with lower high-margin collaboration/other revenue weighing on gross margin (53.9% vs 54.8% YoY, vs 65.8% in Q2) .
  • Guidance reset: FY2023 revenue cut to $28–$30M from >$45M in March .
  • Liquidity/covenant pressure: default under revenue covenants, termination of revolving loan access, required $15M November repayment, and going-concern warning .

Financial Results

Revenue mix (USD $000s):

KPIs and balance sheet (Q3 2023):

• Gross margin: 53.9%
• Operating expense: $13.1M
• Cash, cash equivalents, restricted cash, and investments: $41.6M
• Working capital: $27.3M
• Current notes payable: $15.0M (expected repaid in Nov-2023)
• Pfizer collaboration revenue recognized in quarter: ~$1.0M (timing-based)
• Total stockholders' equity: $17.8M
• Installed base: >250 BioXp systems globally (cumulative)

Guidance Changes

Other relevant Q3 press releases: company notice of reporting date (Nov 7, 2023) .

Earnings Call Themes & Trends

Note: We did not locate a Q3 2023 earnings call transcript in our document corpus or on the company IR site.

Management Commentary

• “This quarter, we continued to drive adoption of our instruments and kits, make progress against important collaborations, advance our mRNA strategy, and strengthen both our Board of Directors and Management Team.” — Todd R. Nelson, PhD, CEO .
• “Went live during the quarter with our ‘7 Days to mRNA’ campaign to build mRNA from sequence in seven days… Completed project tasks necessary to enable in-house manufacturing of our BioXp platform with third quarter cessation of all third-party contract manufacturing activity.” .
• Liquidity tone: “As of September 30, 2023, cash, cash equivalents, restricted cash, and investments were $41.6 million, and current notes payable was $15.0 million… we expect that the $15.0 million current notes payable will be paid… in November 2023.” .
• Risk disclosure: “These factors raise substantial doubt about the Company’s ability to continue as a going concern.” (10‑Q) .

Q&A Highlights

• We were unable to locate a Q3 2023 earnings call transcript in our document set or on the company IR site; accordingly, Q&A highlights and any call‑time guidance clarifications are unavailable for Q3 .

Estimates Context

• Wall Street consensus (S&P Global Capital IQ) for Q3 2023 EPS and revenue was unavailable in our system mapping for TBIO; therefore, comparisons to S&P Global consensus could not be performed (GetEstimates mapping error). As a result, we cannot assess beats/misses vs S&P Global consensus for Q3.
• Result: Anchor comparisons on company guidance trajectory and sequential/YoY trends shown above .

Key Takeaways for Investors

• Material outlook reset: FY2023 revenue cut to $28–$30M (from >$45M in March) underscores weaker capital spending and mix; watch for 2024 baseline and visibility on collaboration milestones to re-accelerate revenue .
• Margin dynamics: Q3 gross margin of 53.9% fell sharply from 65.8% in Q2 as collaboration/other revenue moderated; 9M GM remains stronger YoY at 59.4% given earlier Pfizer milestones .
• Cost discipline continues, but can’t offset revenue pressure: OpEx $13.1M (down YoY) marks a fifth consecutive quarter of reductions/flat trend; operating leverage requires sustained kit adoption and higher-margin mix .
• Liquidity and covenant risk now central: default under revenue covenants, loss of revolver access, required $15M repayment in November, and going‑concern disclosure elevate balance sheet risk; follow cash burn, additional raise paths, and lender terms closely .
• Strategic pivot intact: SOLA enzymatic DNA synthesis and the mRNA build-out (e.g., “7 Days to mRNA”) plus manufacturing insourcing could structurally improve growth and margins over time if execution continues .
• Near-term trading setup: headline risks (guide cut, going‑concern language, forced debt repayment) likely dominate, while incremental positive catalysts include new kit uptake, collaboration progress, and any de‑risking capital actions .

Sources read in full for Q3 2023:

• 8-K 2.02 and press release (EX-99.1) dated November 13, 2023 ; Company IR posting of same .
• 10-Q for period ended September 30, 2023, filed November 13, 2023 –.
• Prior quarters: Q2 2023 8-K and press release (Aug 10, 2023) ; Q1 2023 8-K and press release (May 11, 2023) .
• Other Q3 PR: reporting date announcement (Nov 7, 2023) .